Indonesia President Prabowo Subianto has nominated central bank insider Destry Damayanti as the sole candidate to become the next governor of Bank Indonesia, a move that is expected to bring greater policy continuity following the sudden departure of Perry Warjiyo.
Destry, 62, has served as Bank Indonesia’s senior deputy governor since 2019 and has been acting as interim governor since Warjiyo stepped down late last month for personal reasons. Parliament now has one month to approve or reject her nomination.
The rupiah strengthened following the announcement, reaching its strongest level against the US dollar since June 18, as investors welcomed the nomination after concerns over the central bank’s independence had emerged following Warjiyo’s departure.
Economists said Destry’s long experience within Bank Indonesia and the domestic financial markets could help reassure investors.
“Destry’s nomination is likely to be received well by the markets, given her extensive experience within the central bank as well as domestic financial markets,” said Radhika Rao, an economist at DBS.
“She has explicitly emphasised on the need to stabilise the currency and is expected to reflect policy continuity,” Rao added.
Bank Indonesia has been under pressure to support Prabowo’s economic agenda and help accelerate growth towards 8%, while balancing inflation and rupiah stability.
Under Warjiyo, the central bank raised interest rates by 100 basis points this year and introduced measures aimed at attracting capital inflows and supporting the rupiah.
Destry is viewed by analysts as a pragmatic and stability-focused policymaker who is also supportive of economic growth. Fakhrul Fulvian, chief economist at Trimegah Sekuritas, said her experience suggests she can take a firm stance when market conditions require it without necessarily keeping monetary policy tight for longer than needed.
“During the recent tightening phase, I believe the board’s decisions were driven by the need to restore policy credibility and stabilise expectations rather than by a fundamentally hawkish preference,” Fakhrul said.
“In that sense, Ms. Destry appears comfortable with taking a firm stance when market conditions require it, but I would not interpret that as meaning she would maintain tight monetary conditions for longer than necessary,” he added.
Destry began her career as an economist and previously worked at Citibank and Bank Mandiri. She holds a master’s degree from Cornell University and served on the board of commissioners of Indonesia’s Deposit Insurance Corporation from 2015 to 2019.
Bank Indonesia’s next monetary policy meeting is scheduled for Aug 18-19, while Parliament will determine whether to approve her nomination.
Reuters
